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The Pros and Cons of Group Health Insurance

Leading a healthy lifestyle is important for all of us. And the pandemic has made us more aware of this fact in recent years. There is always a fear of hospitalization due to illness and having to combat the rising healthcare costs. And to fight that fear, people prefer investing in a health insurance policy.

Because of these reasons, many people prefer employers that offer health coverage. Employers have also recognized this need and extended the necessary healthcare insurance support to their employees in the form of group health insurance.

But what exactly do these group health insurance policies do for you? Is it worth it to invest in a group health insurance policy? If yes, then what group health insurance plans should you invest in? What are the advantages and disadvantages of insurance?

We’ll answer all of these questions and more aspects related to group health insurance for employees today.

Pros and Cons of Health Insurance in India

The best group health insurance policy in India for employees is often known as corporate health insurance or employee health insurance. There are several advantages and disadvantages of health insurance policies provided by employers.

Let’s start by looking at the pros of group health insurance in India. These advantages are mentioned in the list below.

Advantages of Group Health Insurance

  • Free Coverage: The premium for employee group health insurance policy is paid by the company on behalf of the employees. This means that the plan becomes available to the policyholder without paying anything out of pocket.
  • No Waiting Period: In most health insurance policies, there is often a waiting period that is applicable before the policyholder can avail of the benefits of the policy. But in the case of a group health insurance plan, there is often no waiting period. This benefit is also provided in the case of family group health insurance policies.
  • Cover for Family Members: Another benefit of having group health insurance policies is that they also provide coverage to the family members of the individual. This means that your spouse, parents, and children can be covered in the same policy in the case of a medical emergency.
  • Maternity and Newborn Baby Coverage: One of the great features of group health insurance policies is that it provides maternity benefits and newborn baby coverage. The newborn baby is covered for up to 90 days. It should be noted that the details of these benefits can change from one policy to another.
  • Cashless Hospital Treatment: Top insurance companies also provide cashless treatment facilities to their customers. This helps in streamlining the claim settlement process. This feature also ensures that the healthcare bill is settled smoothly between the insurer and the hospital. This is also one of the biggest features that are talked about when it comes to the debate of whether the medical claim is good or bad.
  • OPD Coverage: Out-patient treatments are also covered in group health insurance policies. This means that individuals can get treatment in a hospital or a daycare facility as an outpatient.

Disadvantages of Group Health Insurance

Now, let’s talk about the cons of health insurance policies.

  • Fear of Discontinuation: If you are laid off by your employer or if you choose to leave the company, then you will no longer be covered by the group health insurance policy. This means that you and your family will only be covered by the policy as long as you are a part of the organization or as long as you are an employee of the organization.
  • Employer-Dependent Cover: In the case of a group health insurance policy, the employer has the power to choose the health insurance cover for its employees. This means that the employer gets complete say over the coverage, feature, and benefits of the health insurance plan.
  • Lack of Control: In a group health insurance policy, the control over the cover of the policy is with the employer. This means that you don’t get to have much freedom to customize the policy to your needs and requirements. And even if that freedom is allowed, then you would have to pay quite an additional amount for it.
  • Inadequate Coverage: The coverage provided by group health insurance policies is often not adequate. This is mainly seen in metro cities as the cost of healthcare is on the higher side as compared to other cities in the country.
  • No Tax Benefit: In a group health insurance policy, the policyholder is not the one paying for the premium to purchase the health insurance policy. This is why one cannot avail of tax benefits under Section 80D of the Income Tax Act. It should be noted that if you are paying an additional amount for extra coverage, then you can claim tax benefits.
  • Troubled Claim Settling: Historically, people often have trouble or it takes a lot of time to settle claims in a group health insurance policy. However, this con can be eliminated if the employer selects an insurance provider that is known for providing policyholders with a hassle-free claim settlement process.
  • Unreliable Personal Financial Planning: Health insurance policy is a critical component of personal financial management. Because of this, a group health insurance policy can put a bit of unreliableness in the personal financial planning of an individual.


You can get rid of most of these cons if you opt for an individual health insurance policy. It would provide you with more control but you will also be required to pay the premium of the policy from your pocket.

There are pros and cons of group health insurance policies. Because of this, only you can be the judge of whether a group health insurance policy would suffice for you or an individual health insurance policy would be better for your needs.

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